The Congressional Budget Office is out with its latest report on the Affordable Care Act, and here are a few bottom lines:
— The ACA is cheaper than it expected.
— It will "markedly increase" the number of Americans with health insurance.
— The risk-adjustment provisions, which Congressional Republicans want to overturn as a "bailout" of the insurance industry, will actually turn a profit to the U.S. Treasury.

Given all this, why are the first news headlines on the CBO report depicting it as calling Obamacare a job killer?

You can chalk up some of that to the crudity of headline-writing, and some to basic innumeracy in the press. But it's important to examine what the CBO actually says about the ACA's impact on the labor market. (You can find it at pages 117-127, excerpted here.)

The CBO projects that the act will reduce the supply of labor, not the availability of jobs. There's a big difference. In fact, it suggests that aggregate demand for labor (that is, the number of jobs) will increase, not decrease; but that many workers or would-be workers will be prompted by the ACA to leave the labor force, many of them voluntarily.

As economist Dean Baker points out, this is, in fact, a beneficial effect of the law, and a sign that it will achieve an important goal. It helps "older workers with serious health conditions who are working now because this is the only way to get health insurance. And (one for the family-values crowd) many young mothers who return to work earlier than they would like because they need health insurance. This is a huge plus."

The ACA will reduce the total hours worked by about 1.5% to 2% in 2017 to 2024, the CBO forecasts, "almost entirely because workers will choose to supply less labor — given the new taxes and other incentives they will face and the financial benefits some will receive." That translates into about 2.5 million full-time equivalents by 2024 — not the number of workers, because some will reduce their number of hours worked rather than leaving the workforce entirely.

The overall impact on the community will be muted, moreover, because most of that effect will be seen at the lowest levels of the wage-earning scale. The effect will be "small or negligible for most categories of workers," the CBO says, because there will be almost no impact on workers who get their insurance from their employers or who earn more than 400% of the federal poverty line (for a family of three, that's $78,120), the point at which eligibility for federal premium disappears.

As for labor demand, the CBO estimates that on balance, the ACA will increase aggregate demand for goods and services, in part by relieving lower-income people of the burden of health insurance or healthcare expenses, so they can increase their spending on other things. In turn, that will "boost demand for labor," especially in the near term, while the economy remains slack.

The rest of the CBO's economic and budgetary analysis has only modest changes from previous projections. It reduced its estimate of the net costs of the ACA by a vanishingly small $9 billion over 10 years compared to its previous estimate, issued in May. In part this is because many states failed to expand Medicaid, which would be almost entirely paid for by the federal government, and also because premiums are lower than it previously projected. Also, the problems of the healthcare.gov website reduced enrollments, cutting the government's bill for premium subsidies. Overall, the CBO reaffirmed its conclusion that that "the total effect of the ACA would be to reduce federal deficits."

The CBO report cuts the legs out from the GOP's attack on "risk corridors," a provision of the ACA that balances costs and expenses for insurance companies participating in the act by paying insurers whose coverage expenses exceed expectations by a certain margin in the first few years of the act, and collecting excess revenues from those whose expenses come in unexpectedly lower.

We've previously identified this GOP position as the most cynical attack on the ACA of all — the Republicans choose to call it a "bailout" of insurers; actually, it's a way of keeping premiums for some plans from getting out of hand, until the industry has more experience dealing with its new clientele. Unsurprisingly, the GOP is doubling down on this dishonesty by talking about eliminating the risk corridors as a condition for raising the federal debt limit.
The CBO, in any case, says that in 2015-2024, the government will pay out $8 billion in risk subsidies to the insurers but collect $16 billion. Real-world math says this is a gain to the Treasury of $8 billion; GOP math says it's a "bailout." You be the judge.

Regarding its most important bottom-line finding, the CBO says enrollment in individual insurance exchanges may reach only 6 million this year, down from its previous estimate of 7 million, thanks to the problems with the federal enrollment website, healthcare.gov. But it says enrollment will likely surge as the April 1 deadline for signing up approaches, and the 7-million goal is still attainable.

The ACA will increase the number of Americans with health insurance by 13 million this year, 20 million next year, and 25 million each year from then through 2024. Some 80% of those enrollees will be receiving federal subsidies to keep their coverage affordable.
There will be fewer uninsured people living in the United States, and most of those with individual coverage will be getting help to pay for it. Is there another other conclusion to draw from those statistics than the Affordable Care Act is working?

Amazing how this positive report has the White House on DefCon5 and all hands are working to explain it away. They should pipe the Titanic Theme through the sounds system there today.

“All our analysis led us to conclude the effects of [Obamacare] on labor force participation would be a good deal larger than we had though originally,” CBO Director Doug Elmendorf said.

“Fundamentally, the Affordable Care Act provides subsidies to lower income people and those subsidies phase out … that will have some effects on discouraging labor supply.”

In other words, “the 2010 Affordable Care Act is driving businesses and people to choose government-sponsored benefits rather than work.”

Most of those work hours lost will be of the low-wage, low-skilled variety held by just the people Democrats claim to care so much about. According to the Washington Post “low-wage workers are the most likely to drop out of the workforce as a result of the law,” meaning they’re not going to have any prospects of moving up in income.

__________________
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Dave Lane: "I have donated more money to people in my life as an atheist that most churches ever will."

5 Facts:
1) "The reduction in CBO’s projections of hours worked represents a decline in the number of full-time-equivalent workers of about 2.0 million in 2017, rising to about 2.5 million in 2024."

2) "Still, according to estimates by CBO and JCT, about 31 million nonelderly residents of the United States are likely to be without health insurance in 2024, roughly one out of every nine such residents."

3) "CBO and JCT project that, as a result of the ACA, between 6 million and 7 million fewer people will have employment-based insurance coverage each year from 2016 through 2024 than would be the case in the absence of the ACA."

4) "[R]educed incentives to work attributable to the Affordable Care Act (ACA)—with most of the impact arising from new subsidies for health insurance purchased through exchanges—will have a larger negative effect on participation toward the end of that period.
[...]
By providing subsidies that decline with rising income (and increase with falling income) and by making some people financially better off, the ACA will create an incentive for some people to work less.
[...]
[M]ore than 2.5 million people are likely to reduce the amount of labor they choose to supply to some degree because of the ACA, even though many of them will not leave the labor force entirely."

5) "In addition, beginning in 2018, the ACA imposes an excise tax on certain high-cost health insurance plans. CBO expects that the burden of that tax will, over time, be borne primarily by workers in the form of smaller after-tax compensation. Some firms may seek to avoid or limit the amount of the excise tax they pay by switching to less expensive health plans, and in that case workers’ wages should rise by a corresponding amount. Those wages will be subject to income and payroll taxes, however, so total tax payments by those workers will be higher than they would have been in the absence of the ACA. After-tax compensation will thus fall whether firms pay the excise tax or take steps to avoid it, and the resulting increases in average and marginal tax rates will cause a slight decline in the supply of labor, CBO estimates."

Amazing how this positive report has the White House on DefCon5 and all hands are working to explain it away. They should pipe the Titanic Theme through the sounds system there today.

“All our analysis led us to conclude the effects of [Obamacare] on labor force participation would be a good deal larger than we had though originally,” CBO Director Doug Elmendorf said.

“Fundamentally, the Affordable Care Act provides subsidies to lower income people and those subsidies phase out … that will have some effects on discouraging labor supply.”

In other words, “the 2010 Affordable Care Act is driving businesses and people to choose government-sponsored benefits rather than work.”

Most of those work hours lost will be of the low-wage, low-skilled variety held by just the people Democrats claim to care so much about. According to the Washington Post “low-wage workers are the most likely to drop out of the workforce as a result of the law,” meaning they’re not going to have any prospects of moving up in income.

That's called guaranteeing your voting base; those dependent on the government check...it's working beautifully.

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“It's easier to fool people than to convince them that they have been fooled.” - Mark Twain

5 Facts:
1) "The reduction in CBO’s projections of hours worked represents a decline in the number of full-time-equivalent workers of about 2.0 million in 2017, rising to about 2.5 million in 2024."

2) "Still, according to estimates by CBO and JCT, about 31 million nonelderly residents of the United States are likely to be without health insurance in 2024, roughly one out of every nine such residents."

3) "CBO and JCT project that, as a result of the ACA, between 6 million and 7 million fewer people will have employment-based insurance coverage each year from 2016 through 2024 than would be the case in the absence of the ACA."

4) "[R]educed incentives to work attributable to the Affordable Care Act (ACA)—with most of the impact arising from new subsidies for health insurance purchased through exchanges—will have a larger negative effect on participation toward the end of that period.
[...]
By providing subsidies that decline with rising income (and increase with falling income) and by making some people financially better off, the ACA will create an incentive for some people to work less.
[...]
[M]ore than 2.5 million people are likely to reduce the amount of labor they choose to supply to some degree because of the ACA, even though many of them will not leave the labor force entirely."

5) "In addition, beginning in 2018, the ACA imposes an excise tax on certain high-cost health insurance plans. CBO expects that the burden of that tax will, over time, be borne primarily by workers in the form of smaller after-tax compensation. Some firms may seek to avoid or limit the amount of the excise tax they pay by switching to less expensive health plans, and in that case workers’ wages should rise by a corresponding amount. Those wages will be subject to income and payroll taxes, however, so total tax payments by those workers will be higher than they would have been in the absence of the ACA. After-tax compensation will thus fall whether firms pay the excise tax or take steps to avoid it, and the resulting increases in average and marginal tax rates will cause a slight decline in the supply of labor, CBO estimates."